How Uber Plans to Beat Amazon With Bike Messengers

Image: Uber

The pitch is now the most clichéd in all of startup land: “It’s like Uber, but for…”

Homejoy will tell you it streamlines the hunt for a housecleaners in much the same way Uber streamlines the hunt for car rides. DogVacay says it brings the Uber ethos to pet sitting. And Poshmark can Uberize your clothes shopping. So, on Monday, when Uber’s New York general manager told CNBC that the company was unveiling a courier service, his description of the new operation was particularly amusing. “It’s an Uber for things,” he said.

That’s exactly what it is. Instead of pushing a button and getting a ride, UberRUSH lets users push a button to summon a courier, who will ferry small packages across Manhattan by foot or bike. And according to reports, the sender and receiver will be able to track the delivery’s progress in real time, much like waiting for an Uber ride to show up. But this is hardly a new concept. Countless others are trying to build businesses using app-powered bike messengers.

The salient point here is that, with its new courier service, Uber is going after the big boys. With the logistical expertise it has built up over the past four years of perfecting its ride-sharing platform, Uber is sketching the outlines for a challenge to the Amazons, eBays, and Googles of the world, hoping to win a much larger war for same-day delivery.

If perfected, same-day will fuse the best of online shopping — selection, convenience, transparency — with offline, namely getting the thing you want as soon as you buy it. But so far, no one has engineered the winning formula. The biggest names in tech, online retail, and logistics — from Amazon, eBay and Google to Walmart, UPS and FedEx — have all entered the field by taking extremely tentative steps into same-day, moving slowly from city to city, often with a very limited range of options.

The trouble is that this sort of thing is so very hard to get right. The economics are so difficult to crack that even Amazon, which turned two-day delivery into a phenomenon with Amazon Prime, spent years testing its same-day grocery service in its home city of Seattle before rolling out to Los Angeles and San Francisco over the past year.

That’s why Uber is starting small.

Prophesy Fulfilled

Last summer, after Google’s venture capital arm led a quarter-billion-dollar investment in Uber, speculation ran wild that the next phase would be a push-button delivery service running on Google self-driving cars. At the time, Uber wouldn’t rule out delivery as a future option, a non-denial only heightened by one-off holiday stunts like flower delivery on Valentine’s Day and Christmas trees around the holidays. But Uber and its backers also argued that doing rides well was a tough enough engineering problem to crack that delivery would be a distraction.

It’s hardly surprising, then, that Uber would start with couriers on bikes and on foot. In fact, it’s the smartest thing Uber could have done. Bike messengers are a super-low risk way to prototype what a full-on motorized delivery service would look like — kind of a wireframe in real life. Uber can work out all the basic logistical math without having to deal with all the technical and organizational difficulties, not to mention controversies, that would be inevitable if the company jumped right in with cars and trucks. A bike-based service is easy to tweak, and if it doesn’t work, it’s easy to ditch. And if it does work, Uber can just keep scaling until those self-driving cars actually hit the road.

According to its blog post announcing the service: “RUSH is an experiment that we’re rolling out from the Uber Garage — our workshop of sorts where we tinker with new ideas for urban logistics.” In other words, it’s a work in progress. By putting the potential for glitches more or less upfront, Uber hedges the risk that would have come along with a splashy rollout of a service that overpromises and, well, under-delivers.

For now, Uber is still all about rides, a product that will be Uber’s undoing if it falters. If delivery doesn’t work out for now, on the other hand, no big deal. Amazon hasn’t solved that problem, either. And if delivery does work for Uber, Amazon and everyone else will have to take notice that maybe this is what same-day was waiting for: not the company that knows how to sell, but the company that knows how to move.